Mike Rowehl: This is Mobility

The Feb 8th Mobile Monday is all about increasing app store sales, a topic that I’ve been personally paying a lot of attention to given the position that Chomp currently occupies in the environment. And guess what, I should actually be able to make it to the event this time! Woohoo! It’s been a while since I’ve been able to get out to one, but thankfully getting Kate and Mario to help out has meant the events continue even when I’m plowed under. So drop by and thank the two of them if you come out to the event, and say thanks to our sponsors AdMob and Flurry. Should be a great conversation, hope to see you all there!

Kate pulled together a great set of numbers to put together an Investment in the Silicon Valley Mobile Industry report. Interesting stuff in there. The bump in social media investment was obvious to anyone working in the industry, so seeing that reflected in the category investment over time chart is a good sanity check. One interesting bit from the report: less money than expected is going into apps and software. I find that a bit disturbing. Money going into platforms and services, but people still hesitant about the apps themselves. Could be for a whole bunch of reasons - folks just need less money to try out app ideas, so they’re no longer as frequently venture based for instance. However, it’s also possible that everyone sees the potential of mobile, but once again, the rubber just isn’t quite hitting the road.

There are a bunch of success stories within the app stores. And the app stores are changing behaviors, making mobile a more hospitable environment than it was. For the most part. The overall question is how much of this is evolution and how much is revolution. The tectonic shift is still going on, and it’s hard to say if what we’re looking at in a year is going to resemble what we have in any way at all. Blowback from the policies related app store approval have some folks thinking about web distribution for mobile devices again. And from the looks of things maybe web distribution is what was really planned for from the start. We certainly have a much more hospitable web based mobile environment, at least on the platforms where app development is also an option.

Depending on how you’re looking at the market, there are very different monetization models and potential market sizes. See the iFund presentation from iPhoneDevCamp for one particular take on where the app market is headed. Other say they think there’s little money in app sales cause the overall volume of the app store sales is estimated to be about $500M for the year, Apple takes 30% of that, leaving about $350M for developers, divided up by market share - and for some folks that’s just not a healthy environment to build in. For instance if you want to build a billion dollar company, you can’t do it inside a market with a volume of $500M. Me, I don’t want to build a billion dollar company, I would be happy to trade lower overall value for a higher chance of success. So for me, building for the app store right now is just fine.

Looking forward to discussing more at the Silicon Valley MoMo meeting tonight. школа эротического танца владивосток ролики сперма

Matt just posted that the MobileBeat 2009 Startup Competition has extended their deadline for submissions to July 1st. I caught up with Matthaus out at Mobile 2.0 in Barcelona to chat about some of the stuff they have planned for the event. For instance they have Michael Abbott from Palm speaking. Although I’ve seen a bunch of Palm folks out at events these days, it’s the first time I’ve seen someone from their crew speaking since the Pre release. And there’ll be a bunch of folks from the funding side too : Redpoint, Qualcomm Ventures, Blackberry Partners, Kleiner Perkins iFund, T-Mobile Ventures, and others.

Lately lots of VCs have been pinging me actually trying to get a handle on the mobile market. Things have radically shifted over the last two years. The current global economic crisis, major new platforms popping up, existing entrenched players making serious drives to keep relevance, and the redistribution of power and money from a few large players out to a larger number of smaller players has made the market really difficult to decode. Meanwhile, mobile is hot and everyone sees that there’s interesting activity going on. Venture folks still have money to put into the right startups, but finding the right startups is even harder than it used to be.

It’s definitely a unique time in mobile with respect to being able to launch a disruptive startup that carves out it’s own niche in the restructured market. People are open to ideas now that would have seemed ridiculous last year. And the partners and money are readily available if you can make a strong case for what you’re doing. So if you’ve got something that fits the bill, sign up to pitch your startup on July 16th and hopefully I’ll see you at the event!

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The dotMobi folks are up for an emerging technology award at CTIA for Instant Mobilizer. Instant Mobilizer is the evolution of Mowser, so of course it’s got a special place in my heart. The dotMobi folks have done an awesome job bringing it to market and adding some innovative mobile-specific features. Check out the info at the CTIA site and click “Mark as Favorite” if you like what they’ve done. I’m pulling for you folks, good luck!

I’m seeing more and more mobile payments systems getting used in actual products. Stuff like Zong, Paymo and Mobillcash. Surprisingly enough, the places I’m hearing about systems like this being used are in social games (for example social applications using Offerpal) instead of in mobile applications. One of the criticisms leveled at mobile advertising pretty frequently is that it doesn’t make much sense to have an advertising system built somewhere that commerce isn’t flowing. Why advertise on mobile phones if few people are buying through mobile phones?

I still hear pretty regularly that trying to deliver a paid application globally on mobile phones (note, I’m talking about systems outside of the app store models that have cropped up recently, they’re definitely an exception to just about everything) is at best a pain. Often it involves enough cost, revenue share, and engineering that the economics frequently don’t work out. So you’re stuck going through an existing channel even if you would technically have a route directly to consumers. I was expecting that to eventually get sorted out, that someone would crack the global mobile payments problem, allow unbanked users to pay using premium SMS, and deliver the platform in a package that developers could integrate without having to bend over backwards. And that has happened. But the unexpected part is that the uptake seems to be on the wired web, as an alternative payment form alongside credit cards. I was expecting the evolution to be that the systems would be used to back transactions originated on the mobile first, and then eventually start creeping onto the web as well.

For anyone who hasn’t poked around with the systems yet, the flow goes something like this when I pay with a mobile payments system on the web:

1. I decide to purchase a weeks supply of heroin for my virtual junkie for $5 in real world money (my virtual junkie is trying to make it to Rock Star status, adding heroin is the fastest way)
2. When asked how I want to pay I select “by mobile phone” and enter in my phone number
3. I get an SMS saying “Do you want to pay Virtual Junkie $5? Reply with Y to pay”
4. I send an SMS response, replying with Y
5. I get a confirmation back saying that I’ve paid the $5
6. My junkie gets his fix in the game. No more bugs crawling under his skin, excellent, everyone is happy

Actually a pretty nice system compared to paying by credit card. With most credit card systems I have a bunch of info to enter in, if I even have the card I want to use on me. And for folks who don’t have credit cards, like those using prepaid accounts where they charge up with cash each month (or kids who have their parents paying their phone bill), it opens them up to online purchases. Cool, nice, makes sense, I’m happy it happened, lots of good going on there.

So why didn’t this end up opening up mobile commerce more? Or did it, and I’m just not hearing about it? Why does Zong list all online properties and no mobile-specific properties in their list of partners? Did the new commerce line just follow the existing line of purchases? Are folks still hesitant to kick off a transaction from a phone, whereas they just “trust” the web more? They’re paying with their phone, so it’s not an aversion to using the mobile itself as a payment mechanism. But maybe an aversion to starting the transaction on the mobile. Or is it a technical/user experience glitch? Does punching out to reply to an SMS often kill the interaction going on in the mobile browser? Leading to a large dropoff or user disappointment when they can’t find their way back to their purchase? Or is it simply that social and online services are performing so much better than mobile services that the incremental gain of opening up unbanked transactions for existing online purchases way outweighs the benefits of opening up commerce completely tied to the mobile?

I’m pretty sure this is indicative of an opportunity of some kind. For instance, Apple is supposedly adding in-application payments options so that users can pay for goods or service updates within an app after purchase. So there’s probably a decent amount of demand for a system of the kind. I would assume that existing developers could probably use something like Zong or Paymo with some pretty minimal infrastructure to provide a system of their own to get in-app payments working today. We’ll have to see how granular Apple gets with their payment system, and what the terms end up being. Having a bunch of options popping up at the same time should lead to a nice healthy market. And help to keep the Apple based system in check should they start using their position as channel controller to try to squeeze developers. порно фото скачать

I posted yesterday about wanting to use my phone to publish my location in realtime, and I got a bunch of fantastic responses both in the comments and as emails (thanks folks!) I fooled around with some of them with varying degrees of success. Nokia Sport Tracker seems like it would be great! However, I can’t figure out how to make the phone app do it’s job. Maybe my fault, I have an E71 and it’s not listed as a supported model. I’ll have to dig out my N95 and try that one. However, on the Android side, I put FirePin on my phone and was able to upload and share out info about my route (course, it only has to points, cause I have the phone on wifi only right now). FirePin supposedly also works with FireEagle based on the comments I got. But I can’t figure out how that’s supposed to work.

Generally I’ve been hearing frequently about how location based services are really starting to happen this time around. Yea, yea, I know. That’s what we’ve said every year for the last decade. Don’t even bother, I’ve heard it all before. However, this time we have some open platforms with GPS built into the handset, which means there’s a way to work around most of the problems inherent in the carrier based system we had before. Any by “problems” I mean “crippling cost structure”. I can kinda understand how that seems like a more mature market for location based services. Because end users can grant permission to an application for it to directly grab location info, there are all kinds of services out there.

However, I would hardly count that as platform maturity. That’s a degree of market maturity, but not platform maturity. Sure, it’s easier to build a location based app. Just plop your application into any one of the silos that folks have built to control the deployment of your application and management of your data, and blammo! New app. Yea, not the way I normally think about these things. Which is not to belittle the efforts like FireEagle, I just think there are a few missing bits.

Here’s the kinds of stuff I was expecting to see:

• A somewhat generic app that records location information. Recording information to a local file seems to be pretty decent, I guess there are standards floating around for that. However, there doesn’t seem to be much of a standardized interface/protocol for streaming location information up to a server. GPSGate has a protocol that seems to operate over UDP and TCP, but that doesn’t seem to be an accepted public format.
• Some server component that I can chuck on one of my machines to accept samples sent up by that little client shim.
• Basic tools to display those samples on a map. Google has provided most of the backbone and made it pretty simple to use. But there’s also Openstreetmap for those who are Google alergic.

That basic set of functionality is a write-once bit of infrastructure. It gets us out of the “Oh yea, FirePin is great!! Wait, no, you can’t use it on your Nokia”. Not that the tools won’t evolve. But there should be an open set of base clients for all the different mobile platforms, and then anyone who wants to build a web app that pulls in location info can just say “Okay, add local.rowehl.com:9900 to your location client to start updating the Mike-o-matic pile of gold finder app with your current location” Instead we have all these different point solution client applications, frequently hardcoded to send location to a given server. Dumb.

I saw some random references to something called Sexy View, malware aimed at Nokia devices. I was just going to ignore it, but then I realized it appears to be a signed application. Delicious. If nothing else that should allow the response folks to track down where it came from I would assume. The reports out there are vague so far at best, but I’m hoping at some point something will shed some light on how this came about. I’m assuming something happened like some company got careless (or went out of business and just ignored) their signing key for applications, and some malicious party got hold of it. Very curious about this I am.

I found the conclusions based on these numbers quite amusing. Anyone else spot the flaw in the logic that because folks on DeviceAnywhere spend more time testing on the Razr that means that developers are focusing their efforts more on the Razr then the iPhone? That’s not quite the conclusion I draw.

The tricky thing about “the Razr” is that it’s not one phone at all. Spend any time poking around with the phone on different carriers and you’ll find that every carrier and every minor release has different properties. Some carriers have chosen to include some options, others not, others have tweaked them slightly to make them fit into the guidelines for device behavior, etc. It’s a developer nightmare, cause you never know what to expect. And on such a constrained platform to begin with, things like available memory can be severely impacted by the carriers desire to do something as simple as swap out the images being used on the home screen.

On the other hand you have the iPhone. Write an app for the iPhone, it runs on the iPhone. Done.

Now imagine you’re an engineering manager looking at the amount of money you spend to support your application. The global economy is such that most folks are looking to cut costs, so to be responsible you’re trawling though your numbers. What’s your spreadsheet going to have when you look at your porting efforts? The number of users you have on a platform and the cost to maintain the port to that platform. What you’re going to be looking for are platforms where the dollar-per-user cost is high and/or increasing. The iPhone is linear, it costs X dollars to port to iPhone no matter how many users you have. However with the Razr you keep throwing more and more developer and QA time at issues because you need to hit every little variant of the firmware with it’s unique quirks. As your user base grows, the cost of supporting the Razr grows. And in my experience, most applications (social networking and casual games aside) probably don’t really see that many more Razr users then iPhone users despite it having vastly larger distribution numbers.

My take-away from the DeviceAnywhere numbers is “Razr incurring dangerously high engineer and QA costs, if the iPhone base keeps growing existing handsets are in danger of getting dropped.” It’s a funny thing trying to interpret numbers. Assuming that time spent testing for a device means that a business really desires representation on that device is a mistake.

I went to the Symbian Partner Event yesterday, and then grabbed some dinner with a bunch of folks from Symbian and Nokia afterward. Most of what I was interested in hearing about was how they plan to convert to open source. There’s some info up already at the Symbian Foundation website, but that’s all very much marketing oriented material without too much detail about the major important factor - the code. Charles Davies gave a presentation toward the end of the day that laid out some additional details though.

The folks at Symbian and Nokia are just putting together the disparate code bases they work with and trying to unify the layout. They’ve been breaking up the code into sets of modules, it’s looking like there will be about 100 modules all told. The code roughly breaks down into operating system elements, middleware and API elements, application elements, and then some desktop packages. Not everything is going to be open sourced right off the bat, they’ve mentioned that before, due to encumbrances of existing licensed code in the base as it stands. Whole modules will be open sourced however, so that when you get some code it should represent the full set necessary to understand and debug a particular function. I was concerned initially that the open sourcing might follow some kind of horizontal stratification, which would be a lot less useful to anyone looking to dive in and understand how something works.

Which leads to the next question, if you’re a developer at least, can I compile the open source bits and run them somehow? I asked David Wood that later on in the evening, are the parts that aren’t open yet going to come in a binary form that I can use with my own compiled modules to link up a running system? Actually, that is the plan, but the details are still getting worked out it seems. Which would be awesome, I would love to be running a hacked version of my E71 firmware that adds a few functions to the standby screen. However, the partially open model is going to mean that porting to a new platform isn’t something that the standard basement hacker could undertake for a while.

The other interesting bit in his presentation was their approach to branding and ensuring a consistent platform across Symbian based devices. They’re actually putting together a software test suite to exercise the APIs and behavior of a base system and using that as the yardstick for compliance. And the test suite itself is part of what goes out as open source. If your product passes the test suite, you should be good to go. Very nice.

Overall though I think the foundation has some learning to do still about interacting with developers and really enabling a larger ecosystem. Lee Williams, the current Executive Director for the foundation, spent an awful lot of time bashing the Apple and Google store models because they’re old style thinking “control points.” And people need to get away from thinking in terms of control points and start thinking about enabling. So I asked a question about application binary signing, which is an excellent example of control point thinking and a common stumbling block for folks looking to do Symbian development. And his answer was pretty much “Well, that we need because this is telecommunications, and that’s the way telecom works, it’s actually a benefit not a hindrance” and went back to bashing Apple and Google. Booo. Bad form.

Fortunately David Wood and a few folks from Symbian where around later on to pick up the conversation that Lee tried to shut down. Although signing will probably exist going forward in Symbian, they are looking at reworking the mechanism and making things easier for developers. In particular I tend to use the example of getting GPS support into Python for S60. One of the benefits of Python on S60 is supposed to be that you can develop for it without having to get into the details of dealing with the standard SDK (great for me, I don’t use a Windows machine). You cut off that benefit if the developer needs to sign Python modules in order to get access to the interesting functions. In my mind Python is great to enable prototyping and experimentation. Exactly the areas where you would like to expose new and enhanced functionality. I think some of the folks heard the message, but it certainly wasn’t universally received.

Hopefully this is a learning process, and we’ll see the Symbian Foundation folks moving more and more toward genuine open thinking. Right now there seems to be a mix of marketing oriented open thinking together with some deeper understanding of the technical benefits of being open. That’s one of the nice things about being open however, it’s a model that tends to overtake other models.

One of the most common reactions that “mobile experts” have when new converts start waxing poetic about the iPhone is that the iPhone is just a niche device. “It’s only really popular in the US, you need to start thinking about the billions of devices out there in the market” is something I hear pretty frequently. Especially from people at Nokia. They love to talk raw numbers of handsets, cause that’s the leverage they have. And when someone starts saying things like “think about the bigger market” and “address the global audience” it just seems politically incorrect to disagree with them. I mean, it’s gotta be a small-minded move to think about just the US right?

I’ve made that argument over and over again actually, so I’m intimately familiar with it. It sounds so good, and it gives you a warm fuzzy feeling for thinking expansively. And of course some of the top level numbers seem to support that being a good idea. Hell yea, there are billions of cell phones out there in the world. Why bother going after a market of 7 million when there are billions out there!! Crazy right? So allow me to explain why it makes sense. Cause the entrenched mobile market is in some real danger here, getting actively blindsided by new devices and market models. Fingers in their ears. Vehemently denying that anything has really changed.

The first and foremost is this misconception about addressable audience. People throw around the 3 billion number quite a bit, cause that’s the number of cell phones out there. But that’s not your market size. Spend some time with venture capital guys and you’ll eventually catch them joking with each other about the prototypical entrepreneur who walks into their office and claims their market is “everyone with a television” or “everyone who wears shoes” - breathlessly exclaiming that if they just “capture 1% of the market in the first year they can make 10 billion dollars!!!” It’s pretty ridiculous to think that just because there are X of something out in the market, that your potential market size is X.

First of all not everyone with one product automatically wants a complementary product. Even if it’s a great complementary product. Second of all your market size isn’t just an installed base, it’s installed base and ability to reach the customers who make up that installed base. If you have a small number of customers who are easy to reach sometimes that’s better than a large number of customers who it’s difficult to get to. Don’t take my word for it, read some Steve Blank and let him explain it. A few years ago the only option was to reach a localized audience for high cost, or a global audience for high cost. The decision was pretty easy, go for the larger audience. But now you can reach localized audiences for a much lower initial outlay, so there’s a real decision to be made. I don’t think it’s a done deal to be always going after the global market.

There’s also the need to make money. This was a common topic of conversation at Mobile 2.0 this year again. Sure, emerging markets hold a ton of potential. But how do you make money off addressing them? They’re relatively hard to directly monetize. You can make your application so that it’s relevant and usable by people in Africa and China, but if you’re looking to sell it for a few dollars you cut a bunch of volume out of those markets. So you take the millions of people in those markets and reduce it down to the number of people able and willing to pay a few dollars for an application. I have no idea what the percentages would be, but there isn’t too much disposable income floating around there. There’s an associated cost to the application developer in setting up and maintaining payment systems in different areas. And don’t tell me that going through a third party payment provider allows you to address a global audience cause that’s a lie. I’ve worked on it, and there’s customization to be done for different markets no matter who you use. So don’t even try that one any more, I’m officially calling bullshit on it.

The common answer to that is to monetize through advertising. Awesome. That’s a very engineer friendly answer to the problem. It’s true, most problems can be solved by adding an additional layer of abstraction. Unfortunately someone eventually has to make money, and in this case the additional layer of abstraction just hides the problem instead of reducing it. The reason that advertisers advertise is so that they can make money off the audience. If you weren’t able to make money selling to users why should other advertisers be able to? Sure, there are plenty of cases where the diversity of offerings from an advertising network allows for monetization of an audience where a single seller couldn’t. But if the underlying problem is that the audience doesn’t have money to begin with that changes nothing. The value of an advertising audience is the size of the audience multiplied by the average amount of capital you can extract from a member of that audience. It doesn’t matter how large the audience is, anything times zero is always zero.

And there’s the problem of, you know, actually making your application work globally. Another common theme from the conference again this year was context and making applications use the unique features of being mobile. Mobile isn’t just about taking the desktop web or application and jamming it onto a small screen. You need to build on the unique capabilities of handsets and mobile networks. Unfortunately there’s very little global thinking about how to make that happen. We had a panel of folks at Mobile 2.0 talking about their developer programs, handset manufacturers and carriers/operators. They were talking about how they’re helping developers build for their devices and networks. Seems nice on the surface, but that’s not how things should work. Take development for PCs as a model. If I was looking to develop for PCs and had to join Dell’s developer program to get into about developing for Dells, and then Gateway’s developer program to make my app work on Gateway, and then Toshiba to make my app work on Toshibas - and then have to worry about differences between Comcast and Savis and Internap at the network level. Nothing would ever get done. But when I asked folks working on these program about what they’re doing to provide base consistency so that mobile development could work like PC development I mostly got confused reactions.

So why develop specifically for the iPhone? Omar actually summed it up extremely well at the Mobile Web Wars event a while ago. The iPhone has a full ecosystem. It might be small right now, and it might seem like we’re just exchanging multiple overbearing overlords or a single overbearing overlord. But the iPhone is that juicy segment where development is consistent (cause it’s one OS and one device), there’s a way to reach audience directly (via the AppStore if you can get on there), and the user primarily are in affluent areas where advertisers are looking to spend dollars (and part of a great distinct demographic for the most part on top of that). So fricking start paying attention people. You can’t dismiss the iPhone cause the overall numbers are small (unless you’re a VC, then you can continue to poo-poo the small overall market size all you want, that I’m not going to argue against). The specific numbers are compelling. People are still making noise about the iPhone cause it works.

Of course, this doesn’t change the fact that I’m a bleeding heart mobile booster. And that I would love few things more than to have a real global market for mobile solutions that application developers could actually address. It’s going to take some different thinking however. If you can’t make money from directly selling to customers in emerging markets, and collectively they don’t yet make a compelling audience for media plays, what do you do? Well you could let those users create value and skim some off the collective. Take the Amazon Mechanical Turk as an example. Think of it as a way to do micro-outsourcing. Mob4Hire in particular is applying this to mobile already, with a crowdsourced system for doing mobile application testing in areas where it’s normally difficult to get access to different handsets on particular networks. Fantastic.

I’m also a believer that the best people to build solutions for emerging markets is the people in those markets. That’s the idea behind efforts like FabLab and (though not everyone believes it) One Laptop Per Child. Folks living in developed areas normally aren’t familiar with the particular constraints and challenges that go along with living in these other areas. The best way to service them isn’t to do product development in the traditional sense, but to provide hackable systems that allow users in these areas to tailor what they get to the situations they have to deal with. That’s one of the reasons I hold out a lot of hope still for the Linux based mobility efforts, particularly Android, to help these markets move themselves through the progression so that people stop thinking of them as low yield media targets.

Overall though I think it’s kind of ridiculous for folks inside of mobile to be crapping all over “the iPhone hype” while doing little to nothing to help move mobility as a whole into a state where us application developers really can start to address a global audience.